CHIP

Children in United States receive their health insurance from multiple sources: the Children’s Health Insurance Program (CHIP), Medicaid, employer-sponsored insurance, or a qualified health plan on the Marketplace. This creates a fragmented system of coverage for children and families, particularly for low- and moderate-income families, who often have children and parents enrolled in across separate coverage sources.

With CHIP funding scheduled to expire on September 30, 2017, the future of children’s coverage will be up for debate again. Proposals have called for an extension of CHIP funding. However, as Katie Weider and Rodney Whitlock of ML Strategies discuss in their latest Health Affairs blog, it is time for us to stop talking about CHIP, and instead start talking about integrating the myriad of children’s coverage sources. That blog is available here.

Congress returns from its Memorial Day recess to four full weeks of legislative activity. The drama of the American Health Care Act (AHCA) now hangs over the Senate. The House will return to its regular work once they advance the FDA User Fee Reauthorization, with the Senate also having to schedule floor time for the package. Also on our radar this month will be the date June 21st– the date in which insurers decide if they will participate in the Obamacare Marketplace for 2018. This could play a role in the Administration’s ongoing discussions regarding cost-sharing reductions, as well as how the Senate approaches its version of the AHCA. Continue Reading Congress Returns for June Session to Face AHCA, User Fees and More

Welcome to Spring Break! That time of the year where college kids head to a beach somewhere, families pack up for some tourist trap to spend lots of money, and Congress gets out of DC and goes back home. This is also a time to consider where we are and where we are heading in terms of health care policy. We will continue to hear of potential policies aiming to unify Republicans on health care reform, but until we see substantive policy changes that get members to change their votes from the American Health Care Act, this is all talk. However, there is a health care minibus coming. The “minibus” refers to a handful of policy provisions tied together in one piece of legislation. This minibus will carry a number of provisions into law. How many riders will be onboard the minibus remains to be seen. Continue Reading The Health Care Minibus

The Children’s Health Insurance Program (“CHIP”), created in 1997, helps states provide health care coverage to low-income children up to age 19 whose families fall above the Medicaid eligibility threshold but are unable to afford private insurance. Over the past ten years, federal funding for CHIP has steadily increased. Congress reauthorized CHIP in 2015 through MACRA, but the program, which represents one of the last remaining annual (or semi-annual) vehicles for Congress to advance health policy initiatives, will lapse September 30, 2017. CHIP has traditionally received bipartisan support but the question of whether to continue funding the program has recently been at issue.

For the past several years, some experts believed CHIP would slowly wind down as the uninsured rate for children dropped in light of other coverage options under the Affordable Care Act (“ACA”). According to the U.S. Census Bureau, the period of 2013-2015 saw the largest decline in uninsured children ever going from 7.1 to 4.8 percent uninsured. While the ACA provides additional coverage options for low-income families, CHIP remains popular because in some cases it offers better benefits at lower costs than plans on the exchanges. This was the subject of debate during the last reauthorization, and in the lead up to MACRA’s passage, the Medicaid and CHIP Payment and Access Commission (“MACPAC”) advised Congress “to extend federal CHIP funding for a transition period of two additional years, during which time policies can be developed to address concerns about affordability and adequacy, with the ultimate goal being integration of children in Medicaid, employer-sponsored, or exchange coverage depending upon their family circumstances.”

Currently, low-income children who are not eligible for Medicaid have three options for healthcare coverage: through their parents’ employer-based plan, through an exchange plan under the ACA, and through CHIP. These three coverage options differ in the benefits offered and cost-sharing requirements for families. As Republicans determine the fate of CHIP in 2017 and beyond, they will need to consider if coverage variations for low-income children should continue. In other words, when approaching the ACA, Republicans need to keep in mind the positive aspects of CHIP that may not be included in the current marketplace or employer-based plans.

CHIP has been a bipartisan program throughout its existence, but decisions about whether to extend the program are inextricably tied to decisions regarding the ACA.

In a blog post last week, CMS acting administrator Andy Slavitt said that physicians will have the ability to choose among several options to report data to Medicare under the new physician payment system ushered in by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

As we previously discussed, starting in 2019, physicians will be reimbursed on one of two tracks. The first track will continue to provide reimbursement on a fee-for-service basis, but with an upward or downward adjustment based on the physician’s performance under the new Merit-Based Incentive Payment Systems (MIPS). The MIPS system will replace the Physician Quality Reporting System (PQRS), the Meaningful Use Program, and the Value-based Modifier Program. On the other track, physicians participating in advanced alternative payment models (APMs), including certain accountable care organizations (ACOs), will receive their fee-for-service reimbursement without being subject to MIPS. Continue Reading CMS Proposes Flexible Reporting Under MACRA

This is the fourth and final post in our series on the Medicare Access and CHIP Reauthorization Act (MACRA). Pub.L. No. 114-10. We’ve previously covered the repeal of the Sustainable Growth Rate (SGR) in our April 20th post, payment provisions and offsets in our April 21st post, and provisions relating to program integrity and fraud and abuse in our April 23rd post. In this post, we’ll be looking at other important provisions contained in MACRA, including the extension of CHIP funding through fiscal year 2017 and the advancement of interoperability in electronic health record (EHR) systems.

Section 106(a): Medicare Opt-Out and Private Contracts

Since 1998, Medicare has permitted physicians and certain other providers to enter into private contracts with Medicare beneficiaries under Part B and to bill for services without being limited by the upper payment limits established by Medicare. When providers make this “opt-out” decision, they also must agree to decline any reimbursement from Medicare for all Medicare beneficiaries for two years, except in cases of emergency or urgent care provided to a Medicare beneficiary with whom the provider does not have a private contract. MACRA allows private contracts between providers and Medicare beneficiaries to be automatically extended unless the provider furnishes the beneficiary with notice that the contract will not be extended 30 days prior to the expiration of the contract. Additionally, MACRA requires the Department of Health and Human Services (HHS) to make publicly available information regarding opt-out physicians. The information about opt-out physicians will include the number and specialties of opt-out physicians, as well as the proportion of opt-out providers billing for emergency or urgent care. HHS must post this information on its website and update it on an annual basis.

Section 106(b): EHR Interoperability

The Health Information Technology for Economic and Clinical Health Act of 2009 authorized Medicare and Medicaid to provide incentive payments to eligible hospitals and physicians who attest to “meaningfully using” certified EHR technology. Although the ostensible purpose of the Meaningful Use Program was to encourage physicians and hospitals to adopt EHR technology, the program also was used to drive a variety of quality delivery changes for these providers. While the incentives have accomplished the limited goal of expanding the use of EHR, the benefits have been limited due to ongoing problems with interoperability among EHR systems. (“Interoperability” refers to the capability of EHR systems to be able to use the information exchanged among systems based on common standards.) MACRA requires HHS to establish metrics by July 1, 2016, for measuring how hospitals and providers progress in moving toward the goal of widespread interoperability of EHR systems. HHS will have to submit a report to Congress if this goal has not been met by December 31, 2018. In this report, HHS would be required to make recommendations for achieving this goal, such as adjusting payments and de-certifying certain EHR technology. MACRA also requires the Meaningful Use Program to require attestations by eligible hospitals and physicians that they have “not knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability of the certified EHR technology.” This is a standard in the Stark Law EHR exception and Anti-Kickback EHR safe harbor. Finally, HHS is also required to submit a report to Congress (within one year from the date of enactment of MACRA) on methods to aid providers in comparing and selecting certified EHR technology. Continue Reading MACRA’s Advancement of EHR Interoperability and Telehealth

On April 16, 2015, President Obama signed into law, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), ending annual temporary patches and massive lobbying efforts since the late 1990s to prevent significant reimbursement cuts for physicians serving Medicare beneficiaries caused by the so-called Sustainable Growth Rate (SGR) formula. At the end, 392 Members of the U.S. House of Representatives and 92 Members of the U.S. Senate voted in favor of permanently replacing the Sustainable SGR formula in favor of a new system touted as promoting quality over volume.

MACRA also contains several provisions affecting reimbursement to other Medicare providers, program integrity, and fraud and abuse, as well as a mix of other important provisions including extension of the Children’s Health Insurance Program (CHIP). We will address these provisions in subsequent blog posts.

From the SGR “Patch” to MACRA

Health policy experts have long called for an end to the annual, or even sometime monthly, ritual of “patching” the SGR to avoid reimbursement cuts triggered by unsustainable growth in Medicare spending. While lawmakers were concerned about the unsustainability of the Medicare program due to costs that outpaced other economic indicators virtually every year, the notion of significantly cutting physician pay put legislators in an untenable situation, especially as the potential “fiscal cliff” increased well into double digit cuts.

The inevitability of Congressional intervention to hold physicians harmless from a SGR cut rose to new heights in 2013 during the annual rate-setting exercise for Medicare Advantage plans. The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) was overruled amidst intense lobbying, including from senior members of the Senate, prior to the publishing the FY 2014 Medicare Advantage rule. The Actuary’s office had taken the position that the Medicare Advantage rates should be set on the premise that a SGR cut was actually taking place because the law mandated an automatic cut and Congress had not yet stepped in to patch it. In essence, any decision that relied on the assumption of the SGR cut actually taking place was now a matter of academics and not reality.

Although the SGR is now in the history books, it’s safe to assume that new tensions will arise as the need to control growth in Medicare spending continues amidst a rapidly evolving health care industry. Akin to how the ACA acted as a catalyst to nationalize certain payment and delivery reform trends, MACRA is likely to accelerate the current movement in health care towards value-based systems. Thus, stakeholders and policymakers are likely to focus even more on the evolution of payment and delivery reform initiatives due to their increasing relevance and scale.

The New Landscape for Medicare Cost Containment

The SGR tied Medicare physician spending to Gross Domestic Product growth in the overall economy, providing a benchmark that was supported at the time by health care economists. In reality, however, this measure had little to do with costs and quality in the health care system, and was not sustainable. MACRA replaces the SGR with a combination of automatic increases for physicians and incentives for them to participate in a variety of pay-for-performance programs and alternative payment models (e.g. medical homes and accountable care organizations).

Between 2015 and 2019, physicians in the Medicare program will receive an annual update of 0.5 percent. The base reimbursement rate will then hold steady at 2019 levels through 2025, while giving physicians the ability to supplement their reimbursement through payment adjustments in the newly created “Merit-Based Incentive Payment System” (MIPS) and participation in alternative payment models (APMs). Finally, starting in 2026 and beyond, physicians who receive a significant share of their revenues through an APM are eligible for one percent annual increases as opposed to 0.5 percent updates for those not participating in APMs.

New Reimbursement Pathways

2015 – 2019

0.5% annual update

2019 – 2025

0% annual update

(MIPS)Negative payment adjustment capped at 4% – 9% (depending on year) for lowest performers. Positive payment adjustment capped at 3x the respective cut amount for that year for highest performers.

One way to view the new future for Medicare physician cost containment efforts is that it better aligns with existing initiatives to control costs within the context of improving quality. For example, from 2019 until 2025, reimbursement rates are held constant with no automatic increases or decreases. This leaves most physicians with two choices: 1) be subject to payment adjustments through MIPS, or 2) participate in qualifying APMs.

MIPS aims to streamline three incentive programs: 1) the Physician Quality Reporting System (PQRS); 2) the Value-Based Modifier (VBM); and 3) Meaningful Use for electronic health records. Assessments that eventually make up a physician’s composite score will be based on four categories: 1) quality; 2) resource use; 3) meaningful use of electronic health records; and 4) clinical practice improvement activities.

Those physicians with a composite score in the bottom quartile, as compared with a predetermined performance threshold (based on average of last year’s MIPS scores), will receive reimbursement cuts up to the cap set for each year (4% in 2019, 5% in 2020, 7% in 2021, and 9% in 2022). Negative and positive payment adjustments will be ratcheted up or down in a proportional manner for those scores closer to the threshold.

For physicians with a composite score above the threshold, they will receive a positive payment adjustment up to a maximum of three times the annual cap for the negative adjustments. Additionally, physicians receiving the top 75% of all scores above the threshold will receive an additional positive payment adjustment, allocated using a linear distribution formula. In essence, this allows for a greater number of physicians to be eligible for incentive payments, even if the vast majority of them are above the threshold score. Continue Reading With SGR Repealed, Replacement Policy Creates New Priorities

ML Strategies has posted its weekly Health Care Update. This week’s Health Care Update focuses on the latest Congressional developments on the repeal of the Medicare Sustainable Growth Rate (“SGR”), commonly known as the “Doc-Fix” and the Children’s Health Insurance Program (“CHIP”) reauthorization. In a rare showing of bipartisanship, the House passed the SRG replacement and CHIP reauthorization bill, only to have it face contention in the Senate. The Senate was unable to pass this bill before their Easter break. With the Senate planning to take up this legislation when they return in two weeks, the Centers for Medicare & Medicaid Services (“CMS”) indicated that it will hold Medicare claims for up to 10 business days.

Texas Governor Rick Perry signed a series of bills into law last week modifying some of the state’s Medicaid statutes and programs. The laws will take effect on September 1, 2013.

While the legislation was purportedly aimed at enhancing the state’s ability to detect and prevent Medicaid fraud, waste, and abuse, in fact many of the statutory provisions were added to comply with federal mandates necessary to secure ongoing federal funding for the Texas Medicaid program to ensure continued eligibility for incentive recoveries under its civil false claims act. Continue Reading Texas Makes Changes to Medicaid Laws and Programs

Associate Editors

Mintz Levin’s Health Law Practice

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